Political views of realists and rosetinters

[frankbutcher]

we have a massive GDP deficit

Eh? In that one phrase you have demonstrated you haven't got a clue what you are talking about.

We have a massive deficit as a percentage of our GDP. In other words we spend more than our GDP every year. I know exactly what I'm talking about.

as Chippy correctly pointed out you obviously havent a clue

Shown yourself up again mate. GDP is more akin to Turnover, which is a P&L item. GDP is an annual measure.

is wrong - GDP can be measured over whatever period you like
and its totally different to turnover
as I said once already: Gross domestic product (GDP) refers to the market value of all officially recognized final goods and services produced within a country in a given period. You said this was wrong - its the dictionary definition.
Final goods and services produced is not turnover

The government spends more than GDP derives in income. I thought you would get the gist of the point.

government spending is a huge and fundamental part of GDP
so no, govt income is not "derived from GDP'
you may well understanding moneylending but you don't understand economics
you havent understood some of the simplest key concepts and phrases

I didn't actually personally suggest 'spending out of a deficit' at all (the £100 hypothetical was explaining to the hard of thinking how the UK is not a business) but the concept of 'spending out of a deficit' isn't crazy or out-there. Its basic Keynesian economics.

Our deficit is expressed as a percentage of GDP. GDP is in essence all economic activity over an annualised period. From this activity, the government will receive income (taxes etc). It will then spend money. We are spending more than we earn. WHAT IS THE POINT YOU ARE TRYING TO MAKE?? GDP is essentially a turnover figure for the country. What is difficult to understand about that?

So we come back to the question..... how is reckless investment going to get us out of this hole? Let me be clear - investment is going on every day of the week. The government is still investing. Private business is still investing. The government has merely cut back a bit. IT HAS NOT STOPPED SPENDING. WE ARE STILL RUNNING A MASSIVE DEFICIT.

[I Hate Hleb]

I don't know about anyone else but after reading this thread my head hurts!!

[mcdowell42]

I don't know about anyone else but after reading this thread my head hurts!!

Doesnt it make you yearn for the days of the spreadable butter classic thread

[Henry Norris 1913]

come on the then quentin, where did that stone island bullshit come from? have you been speaking to herd- are you his financial advisor out in malaysia?

[highburyJD]

Our deficit is expressed as a percentage of GDP.

where?

GDP is in essence all economic activity over an annualised period.

no it isn't thats annual GDP - you could choose a different period

From this activity, the government will receive income (taxes etc).

no it doesnt - govt spending is part of the figure - which is yet another way that the UK is simply not like a business (and WTF is the "etc"?

It will then spend money. We are spending more than we earn. WHAT IS THE POINT YOU ARE TRYING TO MAKE?? GDP is essentially a turnover figure for the country. What is difficult to understand about that?

nothing - what your saying is easy to understand
its just totally wrong, you don't understand basic economic theory
GDP is not turnover, countries are not businesses

you have a limited sphere of expertise you are attempting to project into non-analagous spheres
(you are a netball coach telling basketball players just pass dont dribble)
your 'knowledge' is not only useless, is probably harmful

So we come back to the question..... how is reckless investment going to get us out of this hole? Let me be clear - investment is going on every day of the week. The government is still investing. Private business is still investing. The government has merely cut back a bit. IT HAS NOT STOPPED SPENDING. WE ARE STILL RUNNING A MASSIVE DEFICIT.

I havent argued we need reckless investment
- but paying people money to dig holes then fill them in (sounds pretty reckless/pointless to me) absolutely COULD have an impact on our economy
its basic keynesian economics extrapolated from the old walrassian model
(I am the Walraaaas)
you dont understand it, no shame in that, its not that interesting TBH
but the UK isnt a business - that idea is stupid
no govt spends more than the countries GDP - that idea is stupid
govt spending is part of gdp, so govt income cant be derived from gdp - that idea is stupid

[frankbutcher]

Talk to the hand.

GDP is essentiallly turnover. I know that GDP is made up of many aspects, but it is still essentially all economic activity over an annualised period. Deficit is expressed as a percentage of GDP in every national newspaper, the BBC, on-line....everywhere.

You have stated that the austerity programme is wrong. The alternative? To spend more money? You fail to see that we've maxed out our credit limit. If you keep spending, the cost of the debt goes up. For a guy who wants to preach to me about economics, you've got an almost autistic obsession with the definition of GDP. I have tried to compare GDP in broad terms to turnover. You have repeatedly split hairs on this thread whilst ignoring the actual issue we are discussing. Are you sure you aren't Miliband and Ed Balls on a wind-up. The comparison is uncanny. Political point-scoring vs getting our debt under control. I know what I'd rather have.

And for the 5th time. How do you spend to get out of a recession. We are still running a massive deficit. Our debt is about 60% of our GDP.

[highburyJD]

you must be able to read...
but it feels like you cant
gdp is not like turnover
the idea of govt spend being larger than gdp (or 'turnover' ffs) is insane

[HashKads]

[frankbutcher]

you must be able to read...
but it feels like you cant
gdp is not like turnover
the idea of govt spend being larger than gdp (or 'turnover' ffs) is insane

I answered this point about 3 pages back. I know that GDP is a combination of many things. If it makes you happy, it is not turnover, but the point i was making was that it is broadly similar. It shows how active production is in the country, which is what the turnover figure does for a business. Secondly I answered your point that the deficit is not greater than turnover/GDP. GDP is one thing, but off the back of economic activity, the country collects income (taxes) and we are spending more than our income. I know you may think you've won the battle (oh, the battle of the definition of GDP...whoop-de-do!!) but you've lost the war.

NOW ANSWER MY QUESTION. How does more investment when we are already deeply in debt lead to recovery? The government is still spending. We're just not writing blank cheques anymore. If we carry on spending, we increase debt and increase the cost of all of it (due to re-grading by rating agencies).

Over to you.....

[highburyJD]

And for the 5th time. How do you spend to get out of a recession.

standard Keynesian model - this is staight outta wiki
"Producers then react defensively (or reactive) making decisions that damage macroeconomics.
Most Keynesians advocate an active stabilization policy to reduce the amplitude of the business cycle, which they rank among the most serious of economic problems. Government policies can be used to increase aggregate demand, thus increasing economic activity, reducing unemployment and deflation."...
"Keynes argued that the solution to the Great Depression was to stimulate the economy ("inducement to invest") through some combination of two approaches: 1: A reduction in interest rates, and 2: government investment in infrastructure. Investment by government injects income, which results in more spending in the general economy. This in turn stimulates more production and investment involving still more income and spending and so forth. The initial stimulation starts a cascade of events, whose total increase in economic activity is a multiple of the original investment."

This is all pretty standard stuff but this isn't my spending plan, I don't have one
this is just basic economic theory. Keynes suggests if the economy contracts govt spending should temporarily expand to fill the void. Traditionally infrastructure based investment has a good rate of return - labourers spend all their money.

As I said this isn't my idea. I'd be very like Dave & Georgie - my govt spending plan would use the fig leaf of the recession to railroad a series of ideological based policies through therefore not really meaningful in this context.

GDP shouldnt be compared to turnover - thats an economically unhelpful concept.
It's basically impossible for govt deficit or spending (your goalposts move a lot) to be larger than either gdp or 'turnover'.

[highburyJD]

you must be able to read...
but it feels like you cant
gdp is not like turnover
the idea of govt spend being larger than gdp (or 'turnover' ffs) is insane

I answered this point about 3 pages back.

no you didnt but I'm glad you now accept you were totally wrong

I know that GDP is a combination of many things. If it makes you happy, it is not turnover, but the point i was making was that it is broadly similar.

reality doesn't 'make me happy

Secondly I answered your point that the deficit is not greater than turnover/GDP.

its not my point - you said it was. Chippy said you're nuts - are you now accepting chippy was right?

GDP is one thing, but off the back of economic activity, the country collects income (taxes) and we are spending more than our income. I know you may think you've won the battle (oh, the battle of the definition of GDP...whoop-de-do!!) but you've lost the war.

which war - my war was the disabuse you of the idiotic notion the UK is a business.

NOW ANSWER MY QUESTION. How does more investment when we are already deeply in debt lead to recovery? The government is still spending. We're just not writing blank cheques anymore. If we carry on spending, we increase debt and increase the cost of all of it (due to re-grading by rating agencies).
Over to you.....

my questions are all based on your quotes
your question is seemingly based on a hypothetical model of giving away one ton notes and paying one ton bonuses - this is not my idea for a path out of debt. It was a simple model to help you understand.

During the 1st great depression - under the stewardship of John Maynard Keynes - the world was steered out of recession by debt based govt spending. This isnt my theory its historical fact.

[frankbutcher]

And for the 5th time. How do you spend to get out of a recession.

standard Keynesian model - this is staight outta wiki
"Producers then react defensively (or reactive) making decisions that damage macroeconomics.
Most Keynesians advocate an active stabilization policy to reduce the amplitude of the business cycle, which they rank among the most serious of economic problems. Government policies can be used to increase aggregate demand, thus increasing economic activity, reducing unemployment and deflation."...
"Keynes argued that the solution to the Great Depression was to stimulate the economy ("inducement to invest") through some combination of two approaches: 1: A reduction in interest rates, and 2: government investment in infrastructure. Investment by government injects income, which results in more spending in the general economy. This in turn stimulates more production and investment involving still more income and spending and so forth. The initial stimulation starts a cascade of events, whose total increase in economic activity is a multiple of the original investment."

This is all pretty standard stuff but this isn't my spending plan, I don't have one
this is just basic economic theory. Keynes suggests if the economy contracts govt spending should temporarily expand to fill the void. Traditionally infrastructure based investment has a good rate of return - labourers spend all their money.

As I said this isn't my idea. I'd be very like Dave & Georgie - my govt spending plan would use the fig leaf of the recession to railroad a series of ideological based policies through therefore not really meaningful in this context.

GDP shouldnt be compared to turnover - thats an economically unhelpful concept.
It's basically impossible for govt deficit or spending (your goalposts move a lot) to be larger than either gdp or 'turnover'.

In an ideal world we would invest in infrastructure to get things going. The thing is that we are already investing a) The Tube infra-structure programme b) The Olympics c) Cross-Rail d) High Speed Rail to Brum........ and many more. The problem we have is that we are walking a tight-rope between extra investment and kkeeping rates down. If Labour hadn't spent quite so much we might have been able to invest more and get things going. However if we spend more (debt) and lose the confidence of the international community, our interest payments will increase to the extent that we will be crippled. I also think its a fallacy that we have suddwenly cut everything. We are still running deficits. We are simply reducing them. The Coaliton are following the same spending plans that Labour were endorsing pre-election.

[highburyJD]

great so now are you
1- admitting you were wrong about govt spending being greater than GDP ? (which was bonkers)
2- accepting the historical fact Keynes guided the world out of the great depression by debt funded spending?

I'm happy to outline my insane political theories which nobody would agree with and will never happen
but just like the tories I believe what I believe irrespective of the economy so its not really the point

[frankbutcher]

I still contend that the broad point I am making is that GDP is like turnover and the UK needs to be run more like a Business. I.e stop spending beyond our means and get our debt under control. I can't believe you've taken the point literally and began picking apart the intricacies of how a business works compared to a country. Surely you must see the general point. Chippy and yourself have also taken one typo where i stated that we were spending more than GDP to construct a 5-page diatribe where you hide from the key point. In the original point I meant that we were spending more than our income. Income is derived from the activities of the country in the specific period (GDP). You might like to quote wiki at me but where does that get us. Keynsianism is a theory. Doesn't mean it's right. We are in an unprecedented global recession.

[the playing mantis]

wish i hadnt started all this.....

however ukip are not so much a joke party, we would not be fooked without europe, a norwegian/swiss style arrangment, in the eea and efta, would suit us much better, we are net contributors to the EU. plus nigel farage is quite funny. if we adopted certain ukip policies we would solve certain issues straight up, unskilled unrestricted mass immigtation that has overpopulated us and put a ridculous strain on infrasture and services, joke justice and civil liberties laws, stupid environmental laws, commiting us to reneawbles that are doubling our energy bills....etc etc
we do need a super tax on the rich and crackdown on tax avoisation by certain multinationals, vodafone anyone???

likewise the devoluion point about north sea oil - thats a rum drum, north sea oil, that would be under scotland jurisdition will run out in the not too distant future and wont support them financially for long. have you not read the economist? i suppose you know better than people who are paid to analyise such things. a devolved scotland would be fooked, and england would benefit. likewise the irriatating and unfair west lothian question would cease to be. however liberals/moderate left (nowadays the so called liberals are more left wing than the historical left parties, they are no longer SDP centrists) dont like the thought of a devolved scotland as in an instant it would undermine the ability of future labour gov's being elected. england is mostly conservative, FACT! look at the voting patterns. although now the tories are not really tories now how long that will remain is anyones guess.